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By Sakda Phanitcul

In light of the Article III (1) and III (4) and Note Ad Article III, the GATT Panel determined that the provisions dealt only with measures affecting the product (emphasis added) being treated.(35) This conclusion was based on the wording of the provisions, such as Article III (4), where it is stated that imported products are to be accorded no less favorable treatment like domestic products are accorded by internal laws.(36) Article III (1) which contains the general principle of national treatment, refers to the application of internal laws affecting products and requires that such regulations on products are not to be applied to protect domestic production.(37) Similarly, Note Ad Article III covers only measures applying to imported products.(38) The Panel also considered two previous panel decision dealing with Article III (2) and (4),(39) and concluded that the national treatment provisions envisioned a comparison, "between the measures applied to imported products and the measures applied to like domestic products."(40) Finally, the Panel noted a 1970 Working Panel Report on Border Tax Adjustment(41) which concluded that border tax adjustments could be applied only for those taxes directly borne by the product not for those borne indirectly by the product.(42) Based on these analysis the Panel concluded that the provisions of the MMPA dealing with imported Mexican tuna were not internal measures covered by Note Ad Article III, since the regulations did not affect the tuna as a product.(43)

Having rejected the US. argument with respect to the application of national treatment, the Panel determined that the US. ban of Mexican tuna was inconsistent with Article XI (1), which prohibits quantitative restrictions. The United States, however, relied upon two exceptions to justify the violation of Article XI (1): Article XX (b), respecting the protection of animal life, and Article XX (g), respecting conservation of exhaustible natural resources.(44)

Part 5


(35) U.S.-Mexico GATT Panel, supra note 21, at 1603. Professor Jackson carefully pointed out that a key point in the panel's decision is that the U.S. is not regulating a product but the method of obtaining that product, i.e., that the regulations are not on tuna, but on the method of catching tuna. He further noted that if the panel reached the other conclusions, the case would be a simple one. The U.S. would simply be applying a nondiscriminatory product standard at the border, as it is permitted to do pursuant to the Note Ad to Article III. However, once the panel determined that the U.S. was trying to distinguish between identical products (emphasis added) (tuna caught by U.S. fishing boats and tuna caught by Mexican fishing boats) on the basis of the production process (emphasis added), then the Note Ad to Article III was not applicable and the U.S. was violating article XI with its import ban on Mexican tuna. The approach to the like product issue has long been followed to GATT. In Belgian Family Allowances, GATT, 1st Supp. BISD 59-62 (1953) (Panel report adopted Nov. 7, 1952), a GATT panel was faced with a Belgian law that levied a charge on foreign goods purchased by public authorities when those goods originated in a country whose system of family allowances did not meet specific requirements. Since the charge was collected after importation and oniv on products purchased by public bodies for their own use, the Panel considered it an internal charge subject to the MFN requirement of Article 1. The case is important because it represents an early GATT decision that discrimination on the basis of how products are produced is not permitted, only discrimination between different products. See Jackson, Davey and Sykes, supra note 1, at 585-86.
One of a very useful article on the issue of product standard and process standard was written by Paul Bousquet and Kenneth Berlin. Environment and Trade: The question of Standard, Environmental Law, American Bar .Association. Spring/Summer 1993. Voiume 12, Number 2, at 3-5. They carefully pointed out that there are several practical difficulties and policy matter for a country to impose process standard on other trading partners while it is possible to harmonize product standard internationally.

(36) Id. at 1616.

(37) Id.

(38) Id.

(39) The first panel report involved a differential internal tax imposed by the United States. In interpreting Article III (2), the panel concluded that the obligation was to establish "competitive conditions for imported products in relation to domestic products." United States - Taxes on Petroleum Lind Certain Imported Substance, 34 GATT BISD Supp. 136, 158 (1988). The second report involved a U.S. law which created a special administrative process for dealing with foreign products alleged to infringe U.S. patent law. The panel examined Article III(4) and determined that the wording "treatment no less favourable" called for equality of opportunity for foreign products. United States - Section 337 of the tariff Act of 1930, 36 GATT BISD Supp. 345, 386-87 (1990). Both cases were cited in Mcdorman, supra note 12, at note 43.

(40) U.S.-Mexico GATT Panel, supra note 21, at 1618.

(41) Border Tax Adjustments, 18 GATT BISD Supp. 97 (1972).

(42) U.S. -Mexico GATT Panel, supra note 21. at 1618.

(43) Id.

(44) In practice, however, the application of paragraph (b) often overlaps with that of paragraph (g) on the conservation of exhaustible resources. See Edmond McGovern, INTERNATIONAL TRADE REGULATION, 1995, AT 13.11-1.